How to generate $50,000 a year from ASX dividends

Are you wanting to earn a passive income of $50,000 from ASX dividends? Then Telstra Corporation Ltd (ASX:TLS) and these shares could…

| More on:
man handing over wad of cash representing ASX retail capital return

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Earning a passive income of $50,000 a year from the share market is entirely possible for regular investors.

There are a couple of ways to achieve this.

How can you earn $50,000 a year from investing?

If you already have a significant nest egg, then investing your funds into shares with generous dividend yields is the quickest way to do this.

Telstra Corporation Ltd (ASX: TLS) or Westpac Banking Corp (ASX: WBC), for example, offer fully franked forward yields in the region of 5%.

This means that an investment of $1 million in their shares would generate $50,000 in dividends this year.

What if you don't have a million dollars?

Very few people will be lucky enough to have a million dollars to invest in the share market. But don't let that put you off.

If you have both time and patience, then earnings $50,000 each year from the share market is possible.

You can achieve this by investing in dividend-paying companies (or future dividend payers) that have the potential to grow strongly over the long term.

A prime example of this is biotechnology giant CSL Limited (ASX: CSL). Let's forget all the capital gains you would have earned over the last 27 years and focus purely on dividends.

When CSL shares landed on the ASX boards in 1994, investors could have picked them up for just 76 cents apiece.

According to a note out of UBS, it is expecting the company to pay shareholders a dividend of approximately $2.95 per share in FY 2021.

While this equates to a paltry 1.1% yield based on the current CSL share price, it represents a mammoth 388% yield on the price you would have paid for its shares in 1994.

That's right! For every dollar you invested into CSL shares in 1994, you would be receiving $3.88 back this year in dividends.

This means that an investment of just $12,000 into the company in 1994 would yield $50,000 in dividends in 2021.

What about the future?

Unfortunately, CSL shares are highly unlikely to repeat this feat over the next 27 years. However, if you look at the smaller side of the market, at shares with strong growth potential and equally strong business models, you might just identify the next success story.

On that note, companies such as Bigtincan Holdings Ltd (ASX: BTH), Damstra Holdings Ltd (ASX: DTC), and Doctor Care Anywhere Ltd (ASX: DOC) could be worth a closer look.

Should you invest $1,000 in Graincorp Limited right now?

Before you buy Graincorp Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Graincorp Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Damstra Holdings Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. recommends BIGTINCAN FPO. The Motley Fool Australia owns shares of and has recommended BIGTINCAN FPO and Telstra Limited. The Motley Fool Australia has recommended Damstra Holdings Ltd and Doctor Care Anywhere Group PLC. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Person pretends to types on laptop drawn in sand.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors had a rough start to the week today.

Read more »

Happy man working on his laptop.
Broker Notes

Leading brokers name 3 ASX shares to buy today

Here's why brokers believe that now could be the time to snap up these shares.

Read more »

Two funeral workers with a laptop surrounded by cofins.
Broker Notes

Macquarie just forecast this ASX 300 dividend share could surge 37%. Here's why

Atop its passive income payouts, Macquarie expects this ASX dividend stock could leap 37% in a year.

Read more »

A person in a gorilla suit leaps really high holding a banana, nearly doing the splits.
Share Gainers

Up 1,238% in a year, why is this ASX gold stock surging again on Monday?

The ASX gold stock is now well into ten-bagger range and still rising fast today.

Read more »

A happy investor sits at his desk in front of his laptop and does the mexican wave with his arms to celebrate the returns from his ASX dividend shares
Share Gainers

Why EOS, Gorilla Gold, Lendlease, and OFX shares are charging higher today

These shares are starting the week on a positive note. But why?

Read more »

A young male investor wearing a white business shirt screams in frustration with his hands grasping his hair after ASX 200 shares fell rapidly today and appear to be heading into a stock market crash
Share Fallers

Why Appen, DroneShield, Gentrack, and New Hope shares are dropping today

These shares are starting the week in the red. But why?

Read more »

An unhappy man in a suit sits at his desk with his arms crossed staring at his laptop screen as the PointsBet share price falls
Materials Shares

Does Macquarie rate James Hardie shares a buy, hold or sell?

The company is set to report FY25 earnings this week.

Read more »

A man looking at his laptop and thinking.
Industrials Shares

Which ASX 200 industrials stock does Macquarie expect to sink 40% over the next 12 months?

Can this name build it's way out of such negative sentiment?

Read more »